Apple attaches performance criteria to CEO Tim Cook’s stock award
Apple has now attached a performance based criteria on CEO Tim Cook’s one million restricted stock units, meaning that they won’t vest until certain performance levels are achieved.
In September last year the price of one Apple share went as high as $705, but since then the stock has lost more than 40 percent of its value. It now fluctuates above $410 a share. This decline in value has happened when Tim Cook was at the helm on Apple. He was awarded these one million shares by the board as a testament of their belief in his leadership after Steve Jobs had stepped down in August 2011.
As per Apple’s SEC filing, 100,000 shares from Tim Cook’s total stock award of one million units will vest in 2016, then another 100,000 shares will vest in 2021. 800,000 shares will vest over the next ten years equally, however 400,000 to those shares are subject to performance criteria a.k.a Total Shareholder Return. Its a measure of the company’s stock performance in accordance with the public data of Standard & Poor. It will also take in account the dividends paid to stock holders, which will be considered to have been reinvested in stock.
The 400,000 shares that are not subject to Total Shareholder Return will vest equally every year after 2021, but only if Tim Cook remains at Apple. The performance based criteria isn’t limited to the CEO only, according to the filing, the same criteria will be applied to stock awards of other top level executives at the company as well.